2) The sales manager of Thompson Sales is considering expanding sales by producing three different versions of its product. Each will be targeted by the marketing department to different income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 70% of units sold will be the original product, 20% will be new model #1 and the remainder will be new model #2. The following information has been assembled by the sales department and the production department. Original Model #1 Moder #2 Sales price (per unit) $50.00 $35.00 $25.00 Material cost 22.50 15.00 10.00 Direct labor 10.00 7.50 5.00 Variable overhead 7.00 5.25 3.50 The fixed costs associated with the manufacture of these three products are $250,000 per year. The sales manager of Thompson Sales is considering expanding sales by producing three different versions of its product. Each will be targeted by income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 70% the marketing department to different The following information has been assembled by the 20% will be new model #1 and the remainder will be new model #2. of units sold will be the original product, sales department and the production department. The fixed costs associated with the manufacture of these three products are $250,000 per year. Required: (a) determine the number of units of each product that would be sold at the break-even point. Original model#1_ model #2_ 2) The sales manager of Thompson Sales is considering expanding sales by producing three different versions of its product. Each will be targeted by the marketing department to different income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 70% of units sold will be the original product 20% will be new model #1 and the remainder will be new model # 2. The following information has been assembled by the sales department and the production department. Sales price (per Original Model #1 Moder #2 $50.00 $35.00 $25.00 Material cost 22.50 15.00 10.00 Direct labor 10.00 7.50 5.00 Variable overhead 7.00 5.25 The fixed costs associated with the manufacture of these three products are $250,000 per year.

2) The sales manager of Thompson Sales is considering expanding sales by producing three different versions of its product. Each will be targeted by the marketing department to different income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 70% of units sold will be the original product, 20% will be new model #1 and the remainder will be new model #2. The following information has been assembled by the sales department and the production department. Original Model #1 Moder #2 Sales price (per unit) $50.00 $35.00 $25.00 Material cost 22.50 15.00 10.00 Direct labor 10.00 7.50 5.00 Variable overhead 7.00 5.25 3.50 The fixed costs associated with the manufacture of these three products are $250,000 per year. The sales manager of Thompson Sales is considering expanding sales by producing three different versions of its product. Each will be targeted by income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 70% the marketing department to different The following information has been assembled by the 20% will be new model #1 and the remainder will be new model #2. of units sold will be the original product, sales department and the production department. The fixed costs associated with the manufacture of these three products are $250,000 per year. Required: (a) determine the number of units of each product that would be sold at the break-even point. Original model#1_ model #2_ 2) The sales manager of Thompson Sales is considering expanding sales by producing three different versions of its product. Each will be targeted by the marketing department to different income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 70% of units sold will be the original product 20% will be new model #1 and the remainder will be new model # 2. The following information has been assembled by the sales department and the production department. Sales price (per Original Model #1 Moder #2 $50.00 $35.00 $25.00 Material cost 22.50 15.00 10.00 Direct labor 10.00 7.50 5.00 Variable overhead 7.00 5.25 The fixed costs associated with the manufacture of these three products are $250,000 per year.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 17E

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